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We get it.  We’ve been there.  Starting a new business can be as daunting as it is exciting.  If you’re a typical entrepreneur, cash flow is at the top of your worry pyramid.  In fact, it goes without saying that when you run out of cash, you run out of business.  As a means of preserving cash, you may do what many of us do, and trade your valuable time (“soft cost”) for the costs of actually investing into tools and much needed technology (“hard cost”). After all, entrepreneurs are experts in multi-tasking and working 29 hour days. If it means saving cash we can flawlessly execute on whatever needs to get done, right?

As an example, many Shopify entrepreneurs are found caught sacrificing their time when it comes to getting e-commerce sales entered into their QuickBooks Online company.  Instead of establishing integration between these 2 key business systems, the viewpoint is typically that their business is either too small or there are just not enough sales to justify automation.  However, when you consider that you could integrate Shopify with QuickBooks Online for as little as $19 a month, the manual route could in fact prove to be the far more costly option, in more ways than one.

The remainder of this article outlines 5 key pitfalls to pay attention to when your Shopify store is not integrated with QuickBooks Online.  If you’re experiencing any of these issues, you may want to consider establishing automated integration sooner than later.

1. Time Spent on Manual Entry is Time Not Spent on Growth

When your systems are not integrated, someone, someway, somehow, has to retype your Shopify sales into QuickBooks Online.  This is a tedious, recurring task that can be as time consuming as it is a distraction from focusing on more important things, such as improving your e-commerce store’s conversions and sales.  If you are thinking that you will just have someone manually enter sales into QuickBooks Online, think about the actual cost (hard or soft) of this decision, and how that compares to just $19 a month for a fully automated solution.  

Regardless of who manually enters your sales into QuickBooks Online, statistics show that mistakes are inevitable.  Errors caused by manual data entry include transpositions and omissions, which can be costly, particularly when such errors go unnoticed for a period of time. In fact, research firm Gartner reports the average cost of poor data quality on businesses is between $9.7 million and $14.2 million.

One of the biggest concerns you might face when entering sales manually is the potential for mistakes in tax filings, and missing important tax filing deadlines. Automating the flow of accurate and timely information about sales helps to reduce tax risks and the potential for compliance penalties.

The bottom line here is that regardless of what stage your Shopify venture is, manual entry becomes a costly distraction. Having to clean up data entry mistakes, address tax filing issues, and unnecessarily draining working capital will likely slow your business’ growth.

2. Disappointing Customers with Out of Stock Items

Nothing will let the air out of your e-commerce balloon faster than having to call back customers and break the bad news that you cannot ship the item(s) they fell in love with because said items are actually out of stock.

How does this happen you ask?  Simple.  It’s another side effect of not integrating Shopify with QuickBooks Online.  When your e-commerce sales are not integrated with your backend system, there is a time lag that causes your systems to be out of sync until such time as the sales are manually entered into QuickBooks Online.  If you are already integrated but your sales are only synchronizing with QuickBooks Online once per hour or once per day, you still run the risk of overselling inventory, as integration needs to occur as instant as possible.  This problem is even more exasperated when you have multiple stores connected to a single inventory source (e.g. omni-channel).  The easiest way to think about this problem is the wider the gap between the time of a sale and the time it takes for inventory data to update, multiplied by the velocity of sales, the bigger the risk of overselling becomes.

3. Orders Ship to Customers Late or Incorrect

Once those customer orders start rolling in, you have to move promptly to deliver on time.  Customers expect (and I mean expect) top shelf service.  Any delay or mistake that flips the last mile fulfillment process sideways, can drive your customers right into the hands of your competitors.  Two of the most common logistical problems that can occur are a) shipping late to customers, and b) shipping the wrong items.

A decent integration tool with operational oversight can empower you with the basics of ensuring your shipments go out on time, inclusive of being able to establish internal Service Levels (SLAs) that bring your attention to any risks of late shipments.  Real-time integration between Shopify and QuickBooks Online brings additional value to your business process by sending your orders through the fulfillment cycle as rapidly as possible, empowering you to fulfill customer orders accurately and quickly, and strengthening your store’s brand in a competitive marketplace when you consistently deliver what customers expect, as they expect it.

4. Lack of Visibility to Your Key Business Metrics

In a marketplace where competition is fierce, having accurate data at your finger tips is essential for making intelligent, timely business decisions.  When using both Shopify and QuickBooks Online, the best way of gaining visibility into these key sales and financial metrics is by leveraging the most real-time integration possible.  Synchronization with QuickBooks Online that is delayed even by just an hour, can lead to gaps that cause incorrect analysis, and impacts your ability to make proper decisions for your business.

You and your accountant must have an accurate view of sales, inventory, cashflow and other key performance indicators that bring clarity to the most efficient and intelligent investments into your Shopify store’s success.  Efficiently managing working capital and inventory replenishment can only occur when your finger is instantly and always on the pulse of your business’ heartbeat.

5. Loss of Your Competitive Edge

Think about it this way.  If you drive a Toyota Corolla, would you think you can win a race against a Ferrari (with all due respect to the Toyota)?  It’s virtually impossible to keep up with your competitors when you’re not leveraging an automated integration solution for your e-commerce store, particularly when they are.  Your competitors will have the advantage, and a stronger handle on managing cost effective inventory that increases their profits, ensuring that items are in stock and delivered to customers on time, and maintaining a high degree of customer satisfaction.  It will be very difficult to outflank them, and they will win the race each and every time.

Conclusion

It’s exciting to have an opportunity to start and grow a Shopify store!  As you maintain good stewardship of your working capital, make sure to avoid these critical issues that can impede your plans for growth and success.  Whether you’re just getting started, or you’re well on your way, automating integration between Shopify and QuickBooks Online can prove to be one of the best investments you make. For a relatively low operating cost, it will free up your resources (including your time), help you gain competitive advantage and drive your business to success.

As you have likely read, e-commerce sales continue to report explosive growth.  According to a recent Statista study (view report), total e-commerce sales within the United States through Q2 2018 reached $249 billion.  This represents a 17.4% increase over the $212 billion in sales for the same period of 2017, and approximately 10% of total retail sales in the United States.

In pursuit of your piece of the proverbial pie, it is common for a small and growing business to first license a shopping cart, then an accounting system, followed by email marketing, a shipping system, CRM and more.  Establishing all of this disparity and not connecting the dots of data and process has proven to have a negative impact on profits and the ability to scale a small business.  Time will be wasted with duplicate data entry as well as searching for and fixing manually inflicted errors in multiple systems.  You also become prone to incorrect decisions caused by not having access to real-time data analytics housed in one place.

Take your accounting system for example.  Intelligently integrating your e-commerce system with your accounting application provides the following 5 essential benefits…

1. Improved accuracy.  According to a recent study by Royal Mail, 6% of businesses’ annual revenue is being lost through poor data quality.  All it takes is one simple mistake to send your customers to an eagerly awaiting competitor.

With intelligent integration, your orders, payment details, refunds, and more are  loaded with 100% accuracy into your accounting application.  The two systems talk directly to each other without human intervention establishing a degree of accuracy that has a positive impact on your business.

“50% of a worker’s time is wasted finding and correcting errors”

2. Reduction in wasted time.  According to the American Productivity & Quality Center (APQC), the average company spends $24.21 to process a sales order manually.  Further, the Harvard Business Review reports that 50% of a workers time is wasted finding and correcting errors, or attempting to confirm data sources they don’t trust.

The APQC suggests that by incorporating automated integration, the cost of processing a sales order can be reduced to $6.  That’s a savings of $15 per order (multiplied by the number of orders your business processes monthly and annually).

3. Real-time data exchange.  Ensuring accurate available inventory, being able to ship accurately and on time, and obtaining timely sales and e-commerce metrics for important game changing decisions, is a cornerstone of any successful e-commerce business.  Having to wait a day or longer for your systems to be updated can have a severely negative impact on your sustainability.

Properly integrating your e-commerce platform with your accounting system ensures near instant data exchange, understands how to match up your e-commerce customers and items with the appropriate representations in your accounting application, and enables you to manage problems by exception through alerts and notifications.

4. More profitable. As your e-commerce business grows, so do the number of orders you receive.  They go hand in hand.  When your systems are not integrated, the more orders you receive, the more time it takes an employee to manually enter orders into your accounting system.  This translates directly into increased cost of sales, inefficient operations and lower profit margins.

As the business owner entering these orders, you may justify your time spent and call it more of a ‘soft cost’, but make no mistake…it’s a real cost, and one of the most expensive.  It’s ownership opportunity cost.  It’s time you are wasting with data entry when you could be (and should be) focusing on the next innovative strategy for growing your business.

Intelligent automation also means lower accounting fees.  Gone are the days of paying your accounting firm to enter your data manually and fix your mistakes.

5. Win-win for you and your CPA. Imagine how happy your CPA and accounting firm will be when they no longer have to clean up time consuming mistakes you make each month in data entry and attempted journal entries.  While your CPA bill may be less, your accounting firm will be thrilled.  Instead of wasting time cleaning up your mistakes, they are able to bring on more clients with less staff, and increase their own profitability.  They will be so pleased with you, they may even start bringing you donuts again.

Use intelligent integration to improve your operational efficiency, boost your profits, and increase customer satisfaction.  When implemented correctly, It’s a small investment with significant ROI.